Arbitration in Korea at KCAB (The Korean Commercial Arbitration Board)

Usually, many license agreements have arbitration clauses. Accordingly IP lawyers have to handle arbitration issues inevitably and we have been assisted and represented our clients regarding arbitration matters.

KCAB (The Korean Commercial Arbitration Board) was established in 1970 and had been duly approved as an official arbitration institution in the Republic of Korea. As international trade and commerce increases, disputes have been arising. In case parties decided to use arbitration, KCAB has been frequently chosen to resolve disputes.

There are two kind of dispute resolution systems ensuring enforceability of their decisions; judicial and arbitration proceedings. Due to its strict confidentiality, arbitration is not as well known while it has been used as typical ADR process.

Arbitration only handles such disputes related to contracts with arbitration agreement in it or a separate written agreement. For KCAB, a model Arbitration Clause must be included in contracts as follows: “All disputes, controversies, or difficulties, or differences which may arise between the parties out of, in relation to, or in connection with this contract, or for the breach thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Korean Commercial Arbitration Board and under the Laws of Korea.”

KCAB has developed rules and practice to meet users’ high and various demands and then would become a new arbitration hub in northeast Asia. KCAB recognizes the paramount need to be neutral, independent and internationally minded administrator in order to deliver the most reliable, efficient and world class dispute resolution services.

Usually litigation in foreign country can be costly, time-consuming. KCAB arbitration can provide fast, impartial and confidential resolution of business disputes, and sometimes cheap compared to litigation.

Korea is a signatory state of the U. N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) since 1973. Also KCAB has signed around 50 international cooperation agreements with similar arbitral organizations throughout the world.

Filing a Divisional Application to Broaden Scope of Claim

Under the Korean patent law, it is not allowed to file a continuation application. Furthermore, after a notice of grant has been issued, it is not available to amend claims, and an applicant is only able to correct typo errors or to narrow claim scope. Any extension of the scope of protection by amendment after grant is not allowed.

The scope of a claim must be narrow enough to be novel and non-obvious over the prior arts. On the other hand, however, claims should be infringed by the competitor’s products, services or processes and thus the scope of claims must be broad enough to cover competitor’s product or process. Even after grant, an applicant may want to have a chance to change the scope of protection.

A divisional application can play a key role for this purpose because an applicant may prepare a new set of claims having broader scope of protection than those of original application. A divisional application can be tricky. It must be differentiated from the original application in the scope of claims. But the same specification can be used for a divisional application. And more than one divisional application can be filed based on an original application.

Substantive examination of a divisional application must be requested with fee for further prosecution. Request for the examination of divisional application may be filed within five years from a filing date of an original application.

In conclusion, therefore, through filing divisional applications, applicants can strategically obtain additional patents for broader scope of protection than those of a parent patent application; or build a patent portfolio, which means more proper and various forms of claims that can be designed to cover competitors’ products, services, or processes after monitoring them for 5 years at maximum.

Apple v. Samsung re: antitrust issues on SEPs in Korea Fair Trade Commission

Apple filed a complaint against Samsung to the Korea Fair Trade Commission (KFTC) which is the South Korea’s antitrust authority on April 3, 2012 alleging that Samsung abused standard-essential patents (SEPs). Apple asserted that Samsung’s lawsuit to seek injunction based on standard-essential patents during ongoing negotiations between two parties violated the Korean Antitrust Law. In particular, Apple contended in their complaint that Samsung misused SEPs for 3G wireless technology to gain an unfair advantage over the competition because these SEPs were supposed to be licensed under fair, reasonable and non-discriminatory (FRAND) terms to Apple.

On February 25, 2014, however, KFTC rejected Apple’s complaint. KFTC pointed out that Apple was first to file a patent lawsuit against Samsung and was responsible for following litigations in some aspects; and that Samsung tried to resolve disputes with the standard-essential patents based on the FRAND licensing terms. KFTC concluded that Samsung's lawsuit was a legitimate act to protect its patent rights.

Roche v. Celltrion re: Herceptin Patent Infringement Lawsuit over Biosimilar Herzuma

Celltrion, a Korean company developed a biosimilar Herzuma to Herceptin (trastuzumab) and obtained market approval (MA) for a biosimilar Herzuma (trastuzumab) from KFDA on January 16, 2014. It has been approved for treatment of early and advanced (metastatic) HER2-positive metastatic breast cancer as well as advanced (metastatic) stomach cancer.

Roche has marketed Herception for the treatment of HER2-positive metastatic breast cancer in 150 mg in Korea. However, for high strength of 440 mg, Roche obtained MA just January 26, 2014. Celltrion obtained MA of the first trastuzumab biosimilar for two strengths, 150 mg and 440 mg at the same time and will launch them soon.

Roche filed lawsuit against Celltrion alleging that Herzuma infringes Roche’s patents. More details will follow soon after they are available.

Menarini’s Priligy (Dapoxetine HCl) Use Patent held Not Valid as being Obvious

Menarini launched Priligy in Korea. Dapoxetine HCl is the active ingredient in Priligy tablets. Korean patent No. 719, 977 covers the branded products and is listed in Green List of KFDA. The patented invention is “Methods of Using Rapid-Onset Selective Serotonin Reuptake Inhibitors for Treating Sexual Dysfunction.” The patent at issue is not for a compound invention but for the second use invention. The Korean patent for the second use invention will expire on June 5, 2021. Several Korean generic companies filed invalidity proceedings to challenge the second use patent. Menarini will face generic companies’ challenges soon.

On August 23, 2013, the IPT of KIPO held that the patent in issue is not valid because the compound and its use have been disclosed in the prior art. There has been no challenge to the compound patent so far. The key issue for the second use patent was a new limitation of “on as as-needed basis” in claim language. The patentee argued that such a new limitation was not found in the prior art and made the claimed use invention being novel and nonobvious over the prior art. However, the IPT rejected the argument on the ground that such limitation is related to a method of administering a drug and thus such limitation may not be regarded as an element for a patent claim under Korean patent law.

The patentee appealed the IPT decision to the Patent Court and the case is pending.